Vidant remains ‘strong’

Published 12:32 am Friday, February 3, 2012

Jack Holsten, chief financial officer of Greenville-based Vidant Health, on Thursday responded to Fitch Ratings’ recent decision to downgrade the health-care system’s outstanding debt from AA- to A+.

“We’re not concerned about having our credit rating lowered to the A-plus level,” Holsten told the Washington Daily News in an interview.

Vidant recently acquired the hospitals in Belhaven and Washington.

Fitch, one of the leading credit-rating agencies in the United States, announced the downgrade Tuesday.

In a news release, Fitch cited Vidant’s “low liquidity position even for the ‘A’ category and the expectation that there will be slow balance sheet improvement given fairly sizeable ongoing capital needs.”

Fitch is one of three national rating agencies that score Vidant and other health-care systems, Holsten explained. The other two agencies are Moody’s and Standard & Poor’s.

In 2006, as debt was being issued for a new “bed tower,” or expanded capacity, and a heart center in Greenville, Vidant took on additional debt, he continued. At that time, Moody’s and Standard & Poor’s downgraded the health-care system’s debt from AA- to A+, Holsten said.

The A+ category still is a “very strong” category, and one of the highest available, he pointed out.

He said the downgrade should have no effect on the local hospitals, Vidant Beaufort Hospital in Washington and Vidant Pungo Hospital in Belhaven.

“The movement by Fitch really doesn’t have any impact on our interest rates and doesn’t have any impact on our ability to borrow at this time, either, because the market had already adjusted for it,” Holsten said.

Vidant continues slowly paying down its higher level of debt “while we’re making really balanced investments in the system as a whole,” he added.

“The regional hospitals are definitely part of that capital plan,” Holsten said.

The nonprofit system’s long-term goal is to reduce its debt while dealing with continuing pressures on the health-care market.

Vidant has improved its cash position but probably not enough to totally offset uncertainty in the marketplace, according to Holsten.

Fitch’s release calls Vidant’s rating outlook stable, indicating it isn’t likely to change in the near future.